Why Is One GIF Suddenly Worth Thousands of Dollars?

How non-fungible tokens make GIFs and memes collectible.

The potential of NFTs came into focus for me this week while listening to a recent episode of the popular podcast, Lovett or Leave It, where the host, Jon Lovett, had a guest on the pod who talked at length about TopShot. In short, TopShot is a sleek partnership between the NBA and DapperLabs that uses NFTs and blockchain to create a digital version of collectible basketball cards, using GIFS of notable moments in NBA history. They claim to have facilitated over $200 million in sales on their website, and they are only just getting started.

Сalled TopShot moments, these GIFs can go from being relatively cheap to valued at hundreds of thousands of dollars. You can obtain them by buying packs off the website or trading them with another person. The rarity of a given TopShot moment depends on who the player is, the significance of the moment, and how many of that specific moment are in circulation. Getting one that’s listed as 1 out of 25 will be valued much higher than one that is 1 of 500.

For having only debuted last October, the buy-in from fans is truly remarkable. With things like NFTs and blockchain and bitcoin, getting people to seamlessly understand how this stuff works and how to interact with these things can be a challenge. With TopShot, the NBA has managed to present all this underlying wonky stuff in a way that people immediately understand. I can go to anyone confused about all of this and say, “ It’s like collecting baseball cards but online,” and they’ll immediately get it. That’s significant.

TopShot is just one example of how the NFT market is exploding in recent months. Collecting and trading digital artwork has also seen growth this past year. BossLogic, an incredibly talented digital artist with millions of followers on social media, has gotten into the NFT game. Bitcoin.com reports that “ In February alone, Bosslogic sold $3.6 million worth of NFT work to crypto collectors. This result echoes other developments in the space, like Canadian musician and artist Grime’s sale of $6 million worth of NFTs at the end of February and NBA Top Shot’s enormous $230 million NFT haul.”

Digital NFT artwork can vary widely. I’ve included a smattering of them below:

Bringing all the fun of collectibles to the Internet.

Some of you may be wondering why a basketball GIF that can be watched for free over and over on Youtube is worth so much or why a Deal With It Meme is being auctioned off for over $7000. These are valid questions that cut at the heart of NFTs themselves. What’s important to remember is that the same logic that applies to fine art or basketball cards or really anything collectible applies here as well.

People often think that what gives a collectible thing its value is its uniqueness. That’s rarely true, for both physical collectibles and now digital collectibles too. Even before NFTs, you could forge artwork or print out a copy of a baseball card. If you really wanted to, you could make a knockoff shoe or beanie baby. All of these things can be copied. The truth is that the value of a collectible is seldom derived from the thing itself but almost exclusively from the context surrounding it.

These aren’t GIFs anymore. They are TopShot moments. Now any free clip you watch on YouTube is just a forgery of the TopShot moment. The same goes for digital art. Sure, I can copy these images if I wanted to, but now those copies are just forgeries of the original. The brilliance of the non-fungible token isn’t because of its ability to track ownership of digital items but because of its ability to reframe how people think about digital items in general. It reframes the relationship between a file and a copy of a file.

It’s a change of mindset that is crucial to making this idea of digital collectibles work.

With the advent of NFTs, this meme above is now a forgery, and the real one is worth thousands of dollars. Truly wild! The job of purveyor of the finest quality memes is almost within reach. We’re still in the early stages, but the explosion of interest from the general public is encouraging. Not only do NFTs have huge ramifications for digital artists and collectors, but they could influence video games in a big way as well.

All of a sudden, microtransactions aren’t so bad.

With the huge shift towards free-to-play, live-service games, the use of microtransactions as a monetization strategy has exploded in recent years. The days of paying $60 upfront for a game at Target, going home, and jumping into a complete game are gone. Instead, we have games that continue forever and are free. Companies figured out that exponentially more money could be made selling gamers relatively cheap-to-make cosmetics repeatedly to millions of gamers than creating a whole game and selling it at a fixed price.

Gamers have responded to this general shift in monetization strategy with mixed reviews for a variety of reasons. Microtransactions are often employed aggressively, are too expensive, gatekeep crucial parts of the game, create a pay-to-win dynamic, or are just plain annoying. What if NFTs could solve at least some of those issues?

One problem that I feel most acutely is that after sinking a good amount of money into a game, I find it hard to quit that game and move on to something else. Why would I try another Battle Royale out since I’ve already sunk hundreds of dollars into Apex Legends on battlepasses, skins, etc.? With NFTs, it would be possible for game developers and publishers to create cosmetics that aren’t exclusive to a certain game. It would also allow the user to fully own the cosmetics they buy and even trade them or auction them off to other gamers if they wanted.

It would also encourage people to try out more and more games. Imagine if instead of playing a different character in each game, you had one character you’ve created and fully own that you play in various games. These games wouldn’t have to be in the same series or even made by the same publisher. Your characters, your cosmetics, your items, all of it comes with you from game to game to game.

Additionally, a secondary market of buying and selling cosmetics between gamers would sprout up as well. Game developers could create truly exclusive gaming collectibles. I always feel great after completing a series of intense quests or challenges and receiving legendary loot because of it. With NFTs, the loot that you find would have actual value and could then provide real meaning and reward for whatever accomplishment you achieved in getting the loot or skin or outfit or weapon in the first place.

These are only a few of the possibilities that NFTs have to offer the gaming industry. This technology feels like the next step in moving away from playing individual siloed worlds to creating a sort of gaming digital multiverse. Where we ultimately end up with all of this remains to be seen, but I am personally excited for the future.

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This post was originally published as part of a free gaming newsletter at https://thevirtualregister.substack.com. If you like what you’ve read and want more content like this, you can check out the full newsletter here.

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